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Metropolitan - Adoption of International Financial Reporting Standards
Metropolitan Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2000/031756/06
JSE share code: MET
NSX share code: MTD
ISIN: ZAE000050456
(`Metropolitan` or `the company`)
Adoption of International Financial
Reporting Standards
For the year ending 31 December 2005
(Abridged version)
Introduction
The Metropolitan Group is required by the JSE Limited (JSE) to prepare its
consolidated financial statements in accordance with IFRS from 2005. IFRS refer
to the application of International Accounting Standards and International
Financial Reporting Standards.
Previously the financial statements of the group were prepared in accordance
with South African Generally Accepted Accounting Practice (SA GAAP). This
change applies to all financial reporting for accounting periods beginning on or
after 1 January 2005 and, consequently, the group`s first IFRS financial
statements will be for the year ended 31 December 2005. The date for transition
to IFRS is 1 January 2004; this represents the earliest period of comparative
information.
This document explains how the group`s financial reporting is affected by the
change to IFRS. Information previously published under SA GAAP has been
restated to the equivalent basis under IFRS. The directors present this
preliminary unaudited restated information in accordance with International
Financial Reporting Standard 1 (IFRS1) - First-time adoption of International
Reporting Standards (IFRS).
This document is an abridged version of a more comprehensive document that can
be obtained on our website www.metropolitan.co.za or can be forwarded
electronically on request.
Voluntary exemptions
In line with the requirements of IFRS 1, First-time Adoption of International
Reporting Standards, Metropolitan Holdings has applied the group`s accounting
policies under IFRS retrospectively from the date of transition, with the
exception of a number of permitted exemptions.
RECONCILIATIONS (UNAUDITED)
The following reconciliations quantify the effect of the transition to IFRS.
The table below summarises the impact on equity at 1 January 2004, 30 June 2004
and 31 December 2004:
01.01.20 30.06.20 31.12.20
04 04 04
Rm Rm Rm
Total equity under SA GAAP 4 834 4 525 5 579
Reversal of goodwill amortised - 19 37
Total equity under IFRS 4 834 4 544 5 616
The following reconciliations provide details of the impact.
The more detailed version of this document contains the explanations of the
impact of the transition to IFRS. It can be obtained on our website
www.metropolitan.co.za or can be forwarded electronically on request.
Restated equity at 1 January 2004 (unaudited)
SA GAAP IFRS
Rm Rm
ASSETS
Property, plant and equipment 121 426
Investment property 2 319 1 911
Goodwill 337 -
Intangible assets 81 438
Investments in associates - 3
Financial assets
Equity securities
- available-for-sale 19 458 19 538
Debt securities
- available-for-sale 8 673 8 370
Loans and receivables 1 755 2 058
Deferred income tax 23 23
Cash and cash equivalents 3 903 3 903
Total assets 36 670 36 670
EQUITY
Capital and reserves attributable to equity
holders
Share capital 1 781 1 781
Non-distributable reserve - -
Foreign currency translation reserve 3 -
Other reserves 45
Retained earnings 2 978 2 936
4 762 4 762
Minority interest 72 72
Total equity 4 834 4 834
LIABILITIES
Insurance and investment contracts 30 231 30 231
Provisions for other liabilities and charges 157 3
Other payables 1 306 1 351
Deferred income tax 36 36
Employee benefit obligations - 109
Current income tax 106 106
Total liabilities 31 836 31 836
Total equity and liabilities 36 670 36 670
Restated equity at 31 December 2004 (unaudited)
SA GAAP IFRS
Rm Rm
ASSETS
Property, plant and equipment 130 445
Investment property 2 511 1 996
Goodwill 284 -
Intangible assets 69 406
Investments in associates - 8
Financial assets
Equity securities
- available-for-sale 25 029 25 213
Debt securities
- available-for-sale 10 088 9 864
Loans and receivables 1 989 2 213
Derivative financial instruments - 117
Deferred income tax 6 6
Cash and cash equivalents 4 028 4 028
Total assets 44 134 44 296
EQUITY
Capital and reserves attributable to equity
holders
Share capital 1 144 1 144
Non-distributable reserve 331 -
Foreign currency translation reserve (5) -
Other reserves - 425
Retained earnings 4 034 3 972
5 504 5 541
Minority interest 75 75
Total equity 5 579 5 616
LIABILITIES
Insurance and investment contracts 35 612 35 612
Financial liabilities
Borrowings 194 194
Derivative financial instruments - 125
Provisions for other liabilities and charges 147 3
Other payables 2 346 2 387
Deferred income tax 154 154
Employee benefit obligations - 103
Current income tax 102 102
Total liabilities 38 555 38 680
Total equity and liabilities 44 134 44 296
Restated earnings for the year ended 31 December 2004 (unaudited)
SA GAAP IFRS
Rm Rm
Income from insurance and investment business 1 793 -
Income from administration business 106 -
Income from holding company 237 -
Income from operations 2 136 -
Insurance and investment premiums received 8 036
Insurance and investment premiums ceded to (282)
reinsurers
Net insurance and investment premiums received 7 754
Fee income
Administration business 368
Investment income 1 969
Net realised gains on financial assets 1 263
Net fair value gains on available-for-sale 3 748
assets
Net income 2 136 15 102
Insurance and investment benefits 5 825
Insurance and investment benefits paid to (140)
reinsurers
Net insurance and investment benefits and 5 685
claims
Change in insurance and investment liabilities 5 215
Amortisation and impairment of intangible 85
assets
Expenses for marketing and administration 2 032
Expenses - 13 017
Results of operations 2 136 2 085
Finance costs (4) (7)
Goodwill amortised and impaired (85) -
Share of profit of associates 4
Income before tax 2 047 2 082
Income tax expense (350) (381)
Income after tax 1 697 1 701
Outside shareholders` share of earnings (20) -
Earnings for year 1 677 1 701
Attributable to:
Equity holders of group 1 681
minority interest 20
1 701
Restated earnings for the six months ended 30 June 2004 (unaudited)
SA GAAP IFRS
Rm Rm
Income from insurance and investment business 263 -
Income from administration business 50 -
Income from holding company 10 -
Income from operations 323 -
Insurance and investment premiums received 3 593
Insurance and investment premiums ceded to (128)
reinsurers
Net insurance and investment premiums received 3 465
Fee income
Administration business 198
Investment income 960
Net realised gains on financial assets 646
Net fair value gains on available-for-sale (992)
assets
Net income 323 4 277
Insurance and investment benefits 2 711
Insurance and investment benefits paid to (70)
reinsurers
Net insurance and investment benefits and 2 641
claims
Change in insurance and investment liabilities 247
Amortisation and impairment of intangible 21
assets
Expenses for marketing and administration 1 038
Expenses - 3 947
Results of operations 323 330
Goodwill amortised and impaired (25) -
Share of profit of associates - -
Income before tax 298 330
Income tax expense (126) (155)
Income after tax 172 175
Outside shareholders` share of earnings (10) -
Earnings for period 162 175
Attributable to:
equity holders of group 165
minority interests 10
175
Date: 07/09/2005 02:01:16 PM
Produced by the JSE SENS Department
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